x

Abu Dhabi, UAESaturday 23 June 2018

Saudi Arabia's $2bn cash transfer gives hope to Yemenis

Rial rises after Saudi finance minister and Yemen's central bank sign transfer agreement

Yemen's southern port city of Aden, which serves as the interim capital after Iran-backed Houthi rebels seized Sanaa in 2014. Fawaz Salman / Reuters
Yemen's southern port city of Aden, which serves as the interim capital after Iran-backed Houthi rebels seized Sanaa in 2014. Fawaz Salman / Reuters

The Yemeni rial rose by nearly 10 per cent against the US dollar after Saudi Arabia signed an agreement with the Yemen Central Bank for the transfer of $2 billion to shore up the economy of the war-ravaged country.

Exchange houses in Aden, the interim capital, were quoting the dollar at 460 rials, compared with 495 before the Saudi finance minister and central bank governor signed the transfer agreement on Thursday. The Saudi riyal was quoted at 120, down from 131.

The Yemeni prime minister confirmed the transfer of funds in a tweet on Friday thanking Saudi Arabia's King Salman and Crown Prince Mohammed bin Salman.

"This is the trustworthiness. The $2 billion deposit by Saudi Arabia is under the command of YCB to shore up the Yemeni rial & to save the economy from collapse. Thank you to King Salman & to the Crown Prince MBS. With great thanks, respect & appreciation to our brothers in KSA," Ahmed bin Dagher wrote on Twitter.

Saudi Arabia leads an Arab military coalition that is supporting Yemen's internationally recognised government against Iran-backed Houthi rebels who seized the capital in 2014. The rebels still hold Sanaa and large areas of Yemen after three years of war that have crippled the economy, displaced millions and destroyed critical infrastructure in what was already the poorest Arab country.

Resident in Aden were optimistic after the rial's rise, hoping that this would lower the cost of foodstuffs, most of which are imported.

"We are looking forward to an improving situation in Aden," said Mahmood Al Hudyani, a hotel receptionist. "We were living desperately because the Yemeni rial lost its value, which was driving us crazy. My salary became something trivial - I earn 60 thousand rials, imagine what that brings me and my family."

_______________

Read more:

Yemen's president names new central bank governor

Saudi cash injection boosts Yemeni currency

Central bank governor says inherited ‘bank empty of money’

_______________

The value of the Yemeni rial dropped sharply as a result of the war and Houthi looting of the central bank before President Abdrabu Mansur Hadi moved it to Aden in 2016. The currency traded at around 215 rials to the dollar before the war but had fallen to about 500 rials. It received a boost when King Salman ordered the $2bn transfer to the central bank in January, but dropped again since then.

Meanwhile, Yemeni troops on Friday repelled another attempt by the Houthis to bring in fighters by sea in Hodeidah province, a spokesman for the western front said.

The rebels tried to land near Kataba village in Khoukhah district, south of Hodeidah city, Colonel Naser Al Redhami told The National.

All the rebels were killed in a battle lasting hours, he said.

The Yemeni military's September 26 website said a seaborne attack on the same site was foiled on Tuesday when the military blew up three boats, killing all the rebels on board.

Also on Friday, the Arab coalition air defences intercepted a rebel missile fired at Yemeni troops in Mokha, a coastal area between Hodeidah and Taez provinces, soldiers on the front told The National.